Ask A Hedge Fund Fraud

[gold st capital]

Can I skip all of that and raise capital trading on my own? Will clients have faith in me if I have not worked a day at a fund?

yes...get 2- 3 years of positive returns under your belt and your solid

correction, sorry i was reading something else a few minutes before i replied to this.

People are predominately foolish and will give money to those who they think can make them a quick buck. This thinking is one of the reasons people in this thread think i am a scammer (although i have given more than I have received) The real problem you will face is the ability to raise capital. As LazyJ10 said it is hard to raise capital in the environment. His statement is true.

Working at a fund will allow you to know what the hell goes on and how to deal with the other side of the business which is regulation. This side of the business is more important than trading because if you cannot follow it, you will not be in business long anyway.

You will also have to actually start a fund, unless you just plan to trade people money individually with out some sort of legal document (this would be a bad idea)

 

[Betonblck]

Asking questions and taking seriously some dude talk about his "hedge fund" who can't even use proper grammar and spell correctly? If my mans was actually doing it for real, he'd be about his money like everyone else who is actually doing it big and not providing tagged pics of the Porsche for NT. Shut this thread down.

There really isn't much of a correlation between success and proper grammar/spelling in an informal forums like NT so....

You should see the way some doctors and execs write emails and other informal communication. You would think it came from a 10 yr old child.

 

[freakydestroyer]

yes...get 2- 3 years of positive returns under your belt and your solid

What is the official way to "document" performance and returns?

 

[dtothedtotheo]

This is Truth!!!!

I used to have a boss that made about 275k a month and he was stressed and coked out. coke is rampant in the brokerage business. Its like the one industry that they don't drug test; people are on many amphetamines 

yeah he speaks of drinking, smoking weed, and alot of tweaked up traders.

similar to boiler room, young men, mid 20s to early 30s making so much money they do not know where to put it there is alot of abuse.

he speaks of the difference of making 100k to 100millions is having the balls to risk 100k you made, lose it all, and have the balls to keep pushing.

its all rigged it seems.  but sell, feed them while your hungry, at the right time and capitalie

 

[gold st capital]

What do you think about this quote?
"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."

This is not true.

if you can afford a RR, you will be getting your advice from a top advisor 9 times out of 10.

Also if you have been to new york, those who ride the subway is not because they cannot afford a car. The city i so congested it can take 45 minutes to get 4 miles.

The avg man who invests his 100-500k gets advice from a person who rides the subway and likely has no car. This would be an employee of the firm that does not rank high. The guy who is his boss usually handles the multi MM accounts and usually does not take the subway; he can afford car service.

 

[gold st capital]

Couldn't quite keep up with the thread as it jumped butndidmyou mention what your AUM is?
Also, crystallization aside, you earn performance annually or quarterly?
Edit- nvm saw it...$7m

annually

management quarterly  

 

[ricky409]

Asking questions and taking seriously some dude talk about his "hedge fund" who can't even use proper grammar and spell correctly? If my mans was actually doing it for real, he'd be about his money like everyone else who is actually doing it big and not providing tagged pics of the Porsche for NT. Shut this thread down.

what do you do?
What school you went to?

Net worth?
Car you whipping?

Stop throwing salt. Grammar aside, he knows what he's talking about.

 

[gold st capital]

Not to thread hijack but the current landscape is very, very hard to raise capital in.
Institution money is larger than individuals but they want a track record. I'm sure Gold St can answer based on his own experience but I'm seeing a lot of new managers launch with 50% of their goal and a huge weighting of that being Friends and Family (hence sub $500k-$1m entry).

This is true. that is why i edited my message to freakydestroyer 

 

[gold st capital]

Asking questions and taking seriously some dude talk about his "hedge fund" who can't even use proper grammar and spell correctly? If my mans was actually doing it for real, he'd be about his money like everyone else who is actually doing it big and not providing tagged pics of the Porsche for NT. Shut this thread down.

I will say one thing about this comment. People often think a trader just finds things to trade all day and is always looking to make money. We are in a new economy with a lot of scrutiny on performance, especially on hedge funds. A traders goal in this market is to try not to blow up his fund like John Paulson (although he has been very successful)

To make 50k trading only takes a few minutes to 1-2 hours.

 

[gold st capital]

Do you consider your field and what you do to be beneficial to society? What do you produce/create?
(I asked the latter question to one of my friends who is a trader, and he said equity lol and im curious to see what your answer is).

Lol i have to laugh at what your friend told you as his answer....its all opinion I guess.

Myself, I believe i create nothing. I simply find value and opportunity and capitalize on it. sometimes i am right, sometimes i am wrong. I don't even produce jobs for the working man as my company does not need all the extra overhead. 

I do however produce excess money for my clients, but nothing for society as a whole.

 

[gold st capital]

What is the official way to "document" performance and returns?

get a financial audit of your trading record from a CPA, well a known CPA firm

 

[gold st capital]

where do you get to know new companies to invest in?
I mean the list has no end, but how do you select, where do you find new companies that have potential, but aren't that well known for example.

I get investors business daily. IBD breaks down every sector and list all companies in that sector. I look for indicators such as price, PE ratio, earnings...I usually select companies based first on price; i then look up the companies chart to see if i like it. If i do not i move to another company. If i do i continue to research. 

IDB give ratings on the strongest stocks in a sector. I don't necessarily care about the extreme intricacies of the stock as i do not hold much longer than a week. If I like the name i will hold longer than a week and learn more about the company.

I have friends on the street and we exchange ideas. Many of my old bosses i still talk to.

I know a few analyst that i pay for ideas

I know other traders, with whom i exchange ideas with.

 

[freakydestroyer]

get a financial audit of your trading record from a CPA, well a known CPA firm

Will my performances from my rookie days count against me? Or can we just start from a certain point in time?

 

[gold st capital]

Will my performances from my rookie days count against me? Or can we just start from a certain point in time?

it depends when you choose to begin your audit. If you need it to look like you have enough years trading 3+ then yes the bad years will count. I would suggest including your bad years. The mark of a good trader is one that figures a way to turn the portfolio positive when it is negative

 

[freakydestroyer]

I get investors business daily. IBD breaks down every sector and list all companies in that sector. I look for indicators such as price, PE ratio, earnings...I usually select companies based first on price; i then look up the companies chart to see if i like it. If i do not i move to another company. If i do i continue to research. 

IDB give ratings on the strongest stocks in a sector. I don't necessarily care about the extreme intricacies of the stock as i do not hold much longer than a week. If I like the name i will hold longer than a week and learn more about the company.

I have friends on the street and we exchange ideas. Many of my old bosses i still talk to.

I know a few analyst that i pay for ideas

I know other traders, with whom i exchange ideas with.

Do you rely much on level II?

 

[gold st capital]

Do you rely much on level II?

Yes. Depth of book really helps and allows you to not fall victim to a market maker triggering your stops.

Helps even more when you want to blow out a position at a definitive price

 

[lazyj10]

Will my performances from my rookie days count against me? Or can we just start from a certain point in time?

If you're serious about this then set up a brokerage like it was a fund structure. Performance attestations will be the engagement you seek if you really want to have a CPA opine on your returns, but more and more firms are opting to get away from performing those.

I'm assuming your trading on your own account, right? I'll give you two scenarios and you can determine the best fit for you.

1) I had a client who was going to be acquired by a bigger fund. They were essnetially a 2-man shop and were trading within their TD Ameritrade account. He had never gotten an audit (acquiring fund required one be performed before closing the transaction). It was a nightmare because from an audit view, we had to get comfortable with the opening balance within his brokerage account and therefore piece everything together based mainly on brokerage accounts. He had used this account before he got serious and took in some Friends/Family money to trade with (i.e. - larger capital to play with). In the end, it's a time consuming process. Point is, don't rush into whatever you want to do.

2) I had another new launch who was trying to raise some capital. He basically had his own capital and some friends/family. All the institutions he's meeting with want a 2-3 year track record and audit. He bit the bullet and launched a domestic LP fund. He kept is simple since it's basically the Fund's own money but it showed the potential investors he's serious. Legal fees for him were a little higher because he has a performance allocation that is less than common. All in to launch from a professional fees stand point he's probably

 

[gold st capital]

If you're serious about this then set up a brokerage like it was a fund structure. Performance attestations will be the engagement you seek if you really want to have a CPA opine on your returns, but more and more firms are opting to get away from performing those.
I'm assuming your trading on your own account, right? I'll give you two scenarios and you can determine the best fit for you.
1) I had a client who was going to be acquired by a bigger fund. They were essnetially a 2-man shop and were trading within their TD Ameritrade account. He had never gotten an audit (acquiring fund required one be performed before closing the transaction). It was a nightmare because from an audit view, we had to get comfortable with the opening balance within his brokerage account and therefore piece everything together based mainly on brokerage accounts. He had used this account before he got serious and took in some Friends/Family money to trade with (i.e. - larger capital to play with). In the end, it's a time consuming process. Point is, don't rush into whatever you want to do.
2) I had another new launch who was trying to raise some capital. He basically had his own capital and some friends/family. All the institutions he's meeting with want a 2-3 year track record and audit. He bit the bullet and launched a domestic LP fund. He kept is simple since it's basically the Fund's own money but it showed the potential investors he's serious. Legal fees for him were a little higher because he has a performance allocation that is less than common. All in to launch from a professional fees stand point he's probably <$100k. What he also mentioned, which applies in your case a bit more, is he went from his personal brokerage account and transfered into a new one at the start of a new month. Meaning, say he had been trading for 4 years prior to considering a fund, well he wanted to start clean based on his proposed strategy. The process, aside from setting up a legal entity which you could also do, was straight forward and easier to measure. If you had to get an audit from standpoint it's easier and if you can get by with a performance attestation that would also be cleaner.

This is really good advice freakydestroyer.

good going lazyj10

 

[freakydestroyer]

Thanks

 

[jthagreat]

p4l

 

[champcruthik]

lol that's the irony, people who's money i manage is very similar to that Chris rock comedy special in which he says, " the neighborhood i live in i live next to everybody, Mary j bilge, puffy, the greats of our time... but do you know what the white guy who lives next to me does? he is a freaking dentist" Lmao

that sums up my clients. privately wealthy people whom you wouldn't know. you would know some of the companies they own but you wouldn't know them. 

I do have the account of 1 high profile football coach and his NFL DE protege. But most people are owners of insurance companies, doctors, and heirs.

Sounds like you're (and Chris Rock) describing Alpine, NJ, more specifically.

 

[champcruthik]

do you want the long answer? it will be a wall of text. i dont mind to do it but you have to care to want to read it. I cannot just state the detailed opinion without facts. At the end of the day though our currency will devalue but wont collapse. All currency's will devalue due to over printing of money if said money ever actually gets out to the masses.

For example the swiss franc is stronger than the USD (look at Forex currency pairs) but it is  not an accurate currency to compare us to. we are nation and they are a small country, worlds of difference economics wise. the whole concept of dollar collapse is speculation. I wager devaluation. However I do not think that is the real place to look to make a mint in the next 5-10 years. Shorting municipal and low investment grade corporate bonds that are within 10 years of maturity will be the way to go.

Currency however will be an easy means to short to make money without, having to put up a lot of capital to get into the game.

so tell me how in depth you want the answer to be.

I'm completely open to reading a full and detailed post in response, even if the original person that posed the question isn't. Share away, my friend. Knowledge is power.

 

[champcruthik]

What do you think about this quote?
"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."

Like that quote. Thanks for sharing, man.

 

[champcruthik]

New Question for OP: Close friend recently got into Compliance in NYC right on Wall St. Recommended it as a field that is relatively fresh and on the cusp of booming. Jobs available in this tough market. Doesn't require significant post-graduate schooling or licenses. I have a Law/Political Science background. What's your take on the Compliance department as a whole?

 

[nycknicks105]

Hey, OP

I sent you an email to the LoveT address that you posted on the first page.

I know you're busy, but it would awesome if we could talk to a little bit and hopefully I can get the opportunity to learn a little bit more.

Thanks.